Annex A > Chapter 4 - National Accountabilities and Roles > Trade unions of healthcare professionals > Employment contracts
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Employment contracts
272 There is a distinction to be drawn between an employee (employed under a contract of service) and an independent contractor (employed under a contract for services). [344]
273 Employment has, as a distinguishing feature, control over the employee by the employer. [345] Although this should not be overstated - e.g. an airline pilot is employed, but his employer may not know how to fly - it gives rise to a power to direct where, when, in what circumstances, and, in particular, what an employee should do, subject only to any contractual agreement between employer and employee to the contrary.
Medical contracts - terms
274 The National Health Service Act 1946 set up the NHS. It provided that: [346]
`All officers employed for the purposes of any hospital providing hospital and specialist services, other than a teaching hospital, shall be officers of the Regional Hospital Board for the area in which the hospital is situated ... and the remuneration and conditions of service of all such officers shall, subject to regulations, be determined by the Regional Hospital Board ...'
275 The effect of this provision was considered by the courts in the case of Barber v Manchester Regional Hospital Board [1958] 1 WLR.
276 The judgment treated the plaintiff as an employee, subject to the terms and conditions which had been promulgated by the Minister of Health. In doing so, the court had held that someone in the position of Mr Barber, though a consultant, and in that sense an officer of the Hospital Board, was, in law, an employee.
277 In later cases, hospital consultants working in the public sector have also been held to be employees. [347]
278 Any consultant to whom the Barber principle might have applied, prior to the creation of NHS Trusts under the National Health Service and Community Care Act 1990, would have had his contract of employment transferred automatically from the Health Authority to the new Trust. [348]
279 Thus, with effect in Bristol from April 1991, and with effect in other parts of the country depending upon the date that the relevant trust came into being, consultants ceased to be employees of the regional health authority, and became employees of the relevant NHS trust. As such, they were no longer under the (theoretical) control of the Region, possibly seen as distant from the unit where they worked, but were from then on under the more direct control of the employing unit.
Junior hospital doctors
280 Junior doctors, either career grade or in training, will in general also be employees. For instance in Johnstone v Bloomsbury Health Authority [1992] QB 333 a senior house officer (SHO) was regarded as engaged under a contract of employment (in 1988/89, when the events which gave rise to his claim arose).
Nurses
281 A nurse will also usually be an employee. Thus in R v East Berkshire Health Authority ex parte Walsh [1985] QB 152 a senior nursing officer was regarded as an employee; and similarly a charge nurse [349] and a nurse [350] have been treated as employees of, respectively, the district health authority and the NHS trust.
282 However, it is open to a hospital authority to contract for services to be provided by an individual health professional. It is thus, theoretically, possible for a consultant (e.g. a locum) to be an independent contractor, rather than employee; and nurses are frequently engaged through a nursing `bank' (agency). In Clarke v Oxfordshire Health Authority [1998] IRLR 125 it was held that a staff nurse who was offered and accepted employment, where it was available, at any of the Health Authority's hospitals and was paid hourly on the applicable scale, but who received no payment during periods when she was not supplying her services and had no contractual entitlement to sick pay or holiday pay, and whose contract stipulated that she had no entitlement to guaranteed or continuous work, was not an employee of the Health Authority, at least at times between engagements. There was no `overriding' or `umbrella' contract of employment to which her work for the Health Authority and its hospitals was subject. However, this is short of saying that each time she actually worked as a nurse she was not an employee - and, of course, each and every time she worked her work was regulated by a contract. In Mensah v West Middlesex University Hospital [351] the Court of Appeal accepted a similar analysis in the case of a midwife who worked as a bank nurse.
Professions Allied to Medicine
283 Similar considerations apply to Professions Allied to Medicine (PAMs); those working in these professions are likely, particularly if engaged full-time, to be employees. If employed sporadically, under a succession of contracts of short duration, they are likely to be employees whilst performing the contract, but not otherwise. They can theoretically be independent contractors, though most are likely to be treated as employees by any court or tribunal. The tendency, generally, of the law is to treat anyone who could be an employee as being an employee. [352]
Chief executives, hospital managers and administrators
284 These are almost all likely to be employees.
General practitioners
285 By contrast, GPs are rarely employees. They are, in general, the equivalent of sole traders, or partners in an enterprise, who provide their services to their patients. The fact that their remuneration comes from central funding does not essentially alter their status as independent contractors. That this is so is recognised in statute. When the PIDA 1998 came into force on 2 July 1999, the ERA 1996 was amended to provide that for the purposes of provisions protecting employees against victimisation and adverse treatment because they had `blown the whistle', the definition of `worker' for the purposes of the Act would be taken to include a person who:
`... works or worked as a person providing general medical services, general dental services, general ophthalmic services or pharmaceutical services in accordance with arrangements made -
`(i) by a Health Authority under Section 29, 35, 38 or 41 of the National Health Service Act 1977...' [353]
Terms of employment
286 Some of the terms and conditions of employment of health care professionals are standard terms, decided in national collective bargaining agreements such as those derived from the Whitley Councils. [354] For many years pay and other terms and conditions of employment were determined centrally for the whole of the NHS by the Whitley Councils and Review Bodies that has evolved over many years. Each occupational group tended to have a separate system of negotiation and consequently there was a multiplicity of different terms and conditions. Collective negotiation over several decades resulted in a large number of different allowances and special payments including complex rules on such things as annual sick leave and acting-up.
Once the trusts were in place there was a widespread move away from centrally agreed negotiated terms. Many Trusts have negotiated local recognition agreements with the principal trade unions and have devised their own terms and conditions. Key features were a reduction in the multiplicity of bargaining groups and the elimination or reduction of special allowances combined with an obligation on the employees to work more flexibly. Added impetus to these developments has been given by the 1995 national pay awards, where some national increases have been limited in order to give scope for local pay awards.
287 Mr Graham Nix, Finance Director, UBHT, told the Inquiry about the UBHT's use of Whitley terms regarding pay:
`Q. ... "Staffing flexibility. The changed status will allow the Trust to reward excellence and ensure that it retains staff" [WIT 0106 0017]. What was the mechanism for that anticipated to be, when you drew up this document with your colleagues?
`A. Centrally, Trusts were told that you could change the way you pay staff. Prior to this you had to stick to Whitley Council payments, terms and conditions of service, and under trust status you could move away from that and pay people locally. In reality, UBHT are stuck to Whitley all the way through, but other trusts did use other mechanisms.
`Q. The plan at this stage [1990], obviously, for those drawing up this document [UBH/T's application for trust status], of which you were one, was to reward excellence, presumably in financial terms. Was there a corollary of that, of an intention, at least a willingness, to penalise the opposite of excellence, where that was found?
`A. No, absolutely not. This was really saying that, as Trust status, you had this flexibility to achieve this end. In reality, we have not used it the way other trusts have done, because we felt that Whitley Council terms and conditions have been created over many years of experience, and we should stick with that.' [355]
288 Mr Hugh Ross, Chief Executive, UBHT from 1995 to date, told the Inquiry about UBHT's use of Whitley terms regarding internal complaints:
`Q. So far as the formalised structures [to deal with internal complaints] are concerned, do you know whether they existed in individual contracts of employment prior to your becoming a Chief Executive?
`A. Yes. Those policies would have been standard in NHS Trusts.' [356]
289 Leading Counsel to the Inquiry raised with Dr Roylance the issue of the UBHT's use of Whitley provisions in non-health disciplinary cases. [357] The health circular put to Dr Roylance states:
`The recommended procedure (above) [the "three wise men" procedure] is intended to deal with cases where disability (including addiction to drugs or alcohol) is suspected in a member of medical or dental staff which might, if not remedied, lead to harm or danger to patients. It is not intended to replace or detract from the procedures set out in HM(61)112 and Section XXXIV of the General Whitley Council Conditions of Service. However, it may be appropriate to use the procedure recommended above in cases where it is possible that disciplinary action could arise but where there is reason to suspect disability.' [358]
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Footnotes
[344] For example, the chauffeur, employed by a company, is an employee, employed under a contract of service; the taxi driver, hailed for a one-off journey, is an independent contractor
[345] See Cooke, J, in Market Investigations Limited v Minister of Social Security [1969] 2 Q. B. 173 p. 184-5
[346] Section 14(1) National Health Service Act 1946
[347] Bliss v South-East Thames Regional Health Authority [1987] ICR 700, CA ; Porter [1993] IRLR 486, QBD; and Mishriki (EAT, Morison J, 10 May 1999)
[348] Section 6, National Health Service and Community Care Act 1990, in relation to `any person who, immediately before an NHS Trust's operational date - (a) is employed by a health authority to work solely at, or for the purposes of, a hospital ... which is to become the responsibility of the Trust ...' and Section 6(3): `... the contract of employment ... shall have effect from the operational date as if originally made between him and the NHS Trust'
[349] Paul v East Surrey District Health Authority [1995] IRLR 305
[350] Gale v Northern General Hospital NHS Trust [1994] IRLR 292, CA
[351] 22 October 1998, CA, unreported
[352] `Harvey on Industrial Relations and Employment Law', para 51; Butterworths
[353] Section 29 of the NHS Act 1977 provides that the Family Practitioner Committee should arrange with medical practitioners to provide personal medical services for all persons in the locality wishing those services, and for the making of regulations providing for payment at predetermined rates for the provision of those services; Section 35 does the same for dentists, Sections 38 and 41 for ophthalmic practitioners and pharmacists
[354] DOH 0015 0471; Whitley Councils for the Health Services (Great Britain) Main Constitution (revised 1 January 1984)
[358] UBHT 0061 0268; `Prevention of Harm to Patients Resulting from Physical or Mental Disability of Hospital or Community Medical or Dental Staff', para 15 (July 1982), HC (82) 13